Fiscal conservatives argue that the enhanced subsidies for Obamacare marketplace health insurance should not be made permanent despite the demands of Democrats, whose votes are needed to fund the government.
The extension of enhanced premium tax credits for Obamacare plans, which are set to expire at the end of the year, was a key demand of Democrats in the lead-up to the government shutdown on Oct. 1, and will likely be a centerpiece of any negotiations to fund the federal government.
President Donald Trump signaled during an Oval Office briefing on Monday that negotiations with Democrats are ongoing and could bring about “good things with regard to healthcare.” That follows his Sunday comment that his goal with respect to Obamacare is to “fix it so it works.”
“It’s not working. Obamacare has been a disaster for the people, so we want to have it fixed so it works,” Trump said Sunday.
Obamacare, or as the 2010 Affordable Care Act is known, established state-level marketplaces in which individuals making less than four times the federal poverty level could purchase subsidized insurance via premium tax credits for qualifying enrollees.
But Democrats passed enhanced premium tax credits under former President Joe Biden as part of the American Rescue Plan during the COVID-19 pandemic, capping the cost of health insurance to 8.5% of income for anyone who purchased a plan on the exchange, subsidizing insurance coverage even for those in the top income brackets.
Democrats re-upped these subsidies to expire at the end of 2025 as part of the 2022 Inflation Reduction Act. Since then, enrollment in Obamacare marketplace exchange plans has ballooned to more than 24 million enrollees.
Without the subsidies, average premiums go up as much as 114%, and the Congressional Budget Office predicts that about 4 million Americans will no longer be able to afford insurance altogether.
Democrats want to make the enhanced subsidies permanent, and some populist Republicans, like Rep. Marjorie Taylor Greene (R-GA) and Sen. Josh Hawley (R-MO), have expressed support for something similar.
Despite mounting pressure, conservatives are making four main arguments against extending the subsidies.
1: The $350 billion price tag
Continuing the premium subsidies will add hundreds of billions of dollars to the federal debt, which fiscal hawks already view as dangerously high.
The CBO estimated in September that extending the tax credits will cost upward of $350 billion over the next 10 years. But conservatives argue that CBO projections are often underestimated, pointing to the anticipated cost of the original Obamacare subsidies in the 2010s.
The temporary enhanced subsidies have already been expensive, costing taxpayers $34 billion in the first two years, according to the CBO and the Joint Committee on Taxation.
Polling data suggests that voters are less likely to support making the enhanced premium tax credits permanent if they learn just how much the program is going to cost.
An October poll from the conservative pollster OnMessage Public Strategies, run by longtime GOP allies, found that nearly 70% of Republicans and more than 44% of independents were less likely to support extending the subsidies after learning how much they will add to the deficit.
In June, the health policy organization KFF found similar results, with 63% of Republicans supporting extending the subsidies without knowing the cost, compared to only 42% after being given the information.
2: Subsidies have benefited high-income earners
Extending the subsidies would have the greatest benefit for those in higher-income brackets. Those below four times the federal poverty level, or FPL, will still be eligible for the original subsidies under the Affordable Care Act. Only the people earning above that level would benefit from an extension of the added subsidies.
The CBO estimated in June that extending the subsidies would cost $55 billion over 10 years to subsidize insurance for individuals and families making five times the poverty level, or more than $78,000 for a single person and more than $160,750 for a family of four.
Over the next decade, an additional $58 billion would go to individuals making between 400% and 499% of FPL. Four times FPL is $62,600 for an individual or $128,600 for a family of four, which is squarely within the middle class bracket, according to Pew Research Center.
KFF estimated in March that about half of enrollees who would lose subsidy eligibility entirely are pre-retirees between the ages of 50 and 64, or those who do not yet qualify for Medicare insurance coverage. This group largely consists of early retirees or small business owners.
Middle-income pre-retirees are likely to see the largest cost increase, according to estimates from KFF’s tax credit expiration calculator.
For example, a 60 year old couple living in Washington D.C. with a gross income of $85,000 per year earns just above 400% of federal poverty. The cost for a mid-level insurance plan would increase by $1,887 per month next year from what they currently pay, costing more than 35% of their income in 2026, compared to only 8.5% this year.
But a couple of the same age in the District earning $60,000 annually, or 284% of FPL, would see their premiums increase by $206 per month without the enhanced credits. That would still be a substantial increase, costing nearly 9.5% of total income compared to only 5.35% in 2025, but it is still comparatively less than the costs for higher-income brackets.
3: Conservatives favor non-government alternatives
Republicans have been opposed to Obamacare and its original premium tax credit system from the beginning, and they have been jockeying to “repeal and replace” Obamacare since the 2016 election cycle.
Chris Pope, a health policy expert with the conservative Manhattan Institute, told the Washington Examiner that while Republicans have been trying to strengthen the private insurance market to lower exorbitant premium costs, Democrats chose to “throw money at the problem” with premium subsidies.
“Instead of fixing the market, [Democrats] just had taxpayers subsidize the thing to make it go away, and I think the Republicans want to fix the insurance market,” Pope said. “They want to have an insurance market where there’s proper competition and proper pressure to reduce costs, rather than just adding in more subsidies to inflate the costs.”
Fiscal conservatives like Sen. Mike Lee (R-UT), Rep. Chip Roy (R-TX), and Rep. Eli Crane (R-AZ) have highlighted on social media this week that the Democrat subsidies were designed in 2021 to fix the skyrocketing premium costs created by the original Obamacare structure from 2010, which Democrats also created.
“Watching Democrats try to conceal the healthcare-affordability crisis created by Obamacare is like watching someone take water out of a bathtub, pour it back into the same tub, and exclaim ‘see, we have more water now!’” Lee said.
Conservatives have also argued that subsidized Obamacare plans, particularly zero-premium plans for those earning less than 150% of the federal poverty level, have made private options, like employer-sponsored plans or private catastrophic coverage, cost-prohibitive and ultimately nonviable.
For example, a Bureau of Labor Statistics analysis from September suggests that many Americans currently receiving subsidies could be covered by employer-sponsored insurance.
Although about three-quarters of employers offer medical benefits to their employees, only 65% of employees participate in employer plans. That’s because part-time workers and those with wages in the bottom quartile are able to get zero-premium insurance and reduced deductibles.
4: Rampant fraud with zero premium plans
Fiscal conservatives have also argued that there has been substantial abuse of the zero-premium plans.
The Trump-aligned Paragon Health Institute published an analysis this summer that found as many as 6.4 million enrollees in 2025 do not actually qualify for zero-premium plans. The report contends that the premium subsidies have enabled bad actors, mainly insurance brokers, to abuse the zero-premiums for people between 100% and 150% of FPL, often signing them up without their knowledge.
Paragon estimates that fraudulent enrollments in zero-premium plans cost taxpayers approximately $27 billion annually.
Similarly, the Centers for Medicare and Medicaid Services found in July that about 1.6 million Americans were fraudulently enrolled in both Medicaid or the Children’s Health Insurance program and a subsidized Obamacare plan.
CMS Administrator Dr. Mehmet Oz in July said that this type of fraud was largely due to the Biden administration during the pandemic pausing periodic eligibility reviews, but it’s also in part due to the relaxed rules for insurance brokers to sign up individuals under 150% FPL for zero-premium plans.
, 2025-10-07 20:15:00, 
, Washington Examiner, %%https://www.washingtonexaminer.com/wp-content/uploads/2023/11/cropped-favicon.png?w=32, https://www.washingtonexaminer.com/feed/, Gabrielle M. Etzel
